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City plans to buy, rehab and sell abandoned homes

The city is preparing to begin a practice of taking abandoned, private residences, fixing them up and re-selling them to first-time homebuyers.

It would be the first time the city has delved into the real estate business, though it was been in the parking lot business for a few years.

Mayor Tom Ambrosino said the city has begun taking action on 60 Warren St. – a long vacant and troubled property – and has appointed Chelsea Restoration Corporation (CRC) as a receiver for the property.

A Chelsea District Court judge appointed CRC the receiver last August and the organization just recently secured funding for the project.

Currently, Chelsea Restoration has a commitment of $52,300 from the North Suburban Consortium and a much larger commitment of $230,000 from Danvers Bank.

Chelsea Restoration has kicked in $10,000 of its own money.

“At the end of the day, they will fix it up and we’ll be the owner,” said the mayor. “The goal is to sell it to a first-time homebuyer.”

The mayor said they would continue to do such things, perhaps also working with the Chelsea Neighborhood Development Corporation, to take control of the abandoned and blighted properties throughout the city.

“We’ll also reach out to Chelsea Neighborhood Development,” he said. “If this one goes well, we may be doing more of these with them…There’s money kicking around, and we’ll work aggressively to tap into this money and do more of these over the course of the next year.”

Though it’s a bold step for the government to be delving into the purchase and sale of private residences, the mayor said he wasn’t worried about such philosophical questions in this case.

He said no owner has come forward after numerous attempts to contact them, and the bank that apparently owns it hasn’t been responsive. He said those with a stake in the property have been well informed of the government takeover.

“I have no qualms about it because generally we do it as a last resort,” said the mayor. “I personally spent six months trying to get this bank in California to respond to this property…It was maddening. I couldn’t get them to do anything…The last conversation I had with them I told them I was going to take it. So far, there’s been no fight.”

The mayor added that there have been accusations of fraud in the mortgage on 60 Warren St., noting that it was a bit “fishy”.

“In the end, this is good for the neighbors,” he said.

Neighbors in the once-quiet Ward 4 street were hounded by problems from 60 Warren St. the last few years, mostly due to young people and gangs trespassing at the vacant home.

Another problem property, 50 Warren St., has been resolved through a private sale and private renovation.